America's Best Health Plans
Desperate to control healthcare costs, employers are rolling out wellness programs with teeth
Among activities that typically qualify for rewards, smoking cessation, use of onsite fitness centers, and weight-loss programs are the big three. Each is offered by about a third of large employers that provide insurance, according to a 2006 employer health benefits survey by the Kaiser Family Foundation.
Healthcare plans are responding by fitting wellness programs into more of their corporate coverage packages. Minnesota-based HealthPartners, for example, offers counseling courses by phone on topics like stress management and healthy pregnancy. Participation entitles employees to a break on their copayments or deductible. The movement by plans to incorporate incentive-based wellness programs is too new and the results too uncertain, however, to be factored into the U.S. News "America's Best Health Plans" rankings.
This is uncharted territory. Privacy is one concern, and ironclad reassurance that your employer won't have access to your health information is hard to come by. "It's a really complicated legal area, and there's no bright line where a person can say, 'I'm definitely protected,'" says Joy Pritts, a health policy analyst at Georgetown University's Health Policy Institute who specializes in privacy. "What it comes down to is whether or not you trust your employer."
Pocketbook pressure. To many employees, discrimination is a hot button. Federal law bars employers from requiring employees to take part in wellness programs. But consumer advocates worry that building sizable financial inducements into these programs could unduly pressure employees who might prefer not to participate—and once they take part, they could become discrimination targets.
Federal regulations that took effect in July added another wrinkle: Programs that offer rewards or penalties tied to particular standards can do so only if an alternative—going for daily walks, for example, instead of maintaining a BMI under 30—is offered to get the reward or avoid the penalty to employees who can't or shouldn't meet them. Such employees might include someone with a genetic predisposition toward high blood pressure, perhaps, or on a drug for which weight gain is a side effect.
The new regulations also stipulate that the value of rewards and penalties can be as high as 20 percent of an individual's total employee and employer outlay for health plan premiums. Consumer advocates argue that healthy employees will find it much easier to take advantage of incentives than those with chronic conditions or other illnesses. They also worry that 20 percent can represent such a substantial sum that employees may feel unfairly compelled to jump on the wellness wagon. A typical family policy costs roughly $12,000 a year: a 20 percent reward or penalty would hit $2,400. "When an employee who fails to participate in a wellness program is significantly worse off financially than an employee who does participate, there is very little voluntary decision making involved," says Jeremy Gruber, legal director for the National Workrights Institute, an advocacy group.
Garry Mathiason, senior partner at Littler Mendelson, an employment and labor law firm, expects litigation down the road as employers test how hard they can prod employees. But he says lawsuits won't check the trend—"it's like building a dam against a tsunami." Hundreds of companies contacted Littler Mendelson after the company published a paper this spring exploring the legality of such aggressive approaches as penalties for nonparticipation.
Opinions are strong but evidence weak on carrot vs. stick as more likely to change behavior. At Pitney Bowes, the mail technology company in Stamford, Conn., the choice is to accentuate the positive. Besides the usual weight-loss, smoking-cessation and health-education programs, the amount employees pay for drugs for chronic conditions like diabetes and asthma has been lowered.
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